WASHINGTON — Senior lawmakers said Thursday that they were moving quickly to take advantage of the postelection political atmosphere to try to strike an agreement that would avert a fiscal crisis early next year when trillions of dollars in tax increases and automatic spending cuts begin to go into force.

Senator Bob Corker, Republican of Tennessee, said he had begun circulating a draft plan to overhaul the tax code and entitlements, had met with 25 senators from both parties and “been on the phone nonstop since the election.”

Senator Olympia J. Snowe, the Maine Republican who will retire at the end of the year, made it clear that she intended to press for a deal to avert the so-called fiscal cliff and get serious on the deficit, lame duck or not.

“The message and signals we send in the coming days could bear serious consequences for this country,” she said. “It could trigger another downgrade. It could trigger a global financial crisis. This is a very consequential moment.”

Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, extended an olive branch to Republicans, suggesting Thursday that he could accept a tax plan that leaves the top tax rate at 35 percent, provided that loophole closings would hit the rich, not the middle class. He previously had said that he would accept nothing short of a return to the top tax rate of Bill Clinton’s presidency, 39.6 percent.

“If you kept them at 35, it’s still much harder to do,” Mr. Schumer said, “but obviously there is push and pull, and there are going to be compromises.”

The nonpartisan Congressional Budget Office underscored the stakes in a report Thursday that framed Washington’s dilemma. It said that if automatic spending cuts go into force and all the Bush-era tax cuts expire, the nation would slip into recession next year and unemployment would rise to 9.1 percent, from October’s rate of 7.9 percent. But simply canceling those deficit-reduction measures would risk a financial crisis that would make matters worse, the report said.

The accelerated activity in Washington showed that members of Congress believed the election had amplified the imperative to strike a deal. Still, signs that the two sides are open to some compromise are no guarantee that they can reach an agreement after warring for two years. Many Republicans will continue to resist any proposal that can be read as increasing taxes, and many Democrats will balk at changes in entitlement programs and spending cuts.

Lawmakers also have a wary eye on the electoral landscape. Senator Mitch McConnell of Kentucky, the Republican leader and a crucial player in budget talks, is up for re-election in 2014 and may resist any deal that could foster opposition back home.

House members of Congress clearly see recent events creating an opening in the post-election session of Congress, when some retiring and defeated lawmakers could have a freer hand on voting for legislation, absent political consequences. Republicans were weakened by losing seats in both the House and the Senate, while Democrats are eager to move to issues like immigration, which animated Latino voters and helped deliver victory on Tuesday. “The conditions are there to act,” Mr. Corker said. “I think the environment is different now.”

Even conservative Republicans are signaling newfound flexibility. Aides said that on a conference call of House Republicans, a number of lawmakers spoke up to say they needed to give their leaders breathing room and avoid brinkmanship.

The budget office report suggested that allowing the Bush-era tax cuts to expire for households earning more than $250,000 a year — a position strenuously opposed by Congressional Republicans — would have relatively modest economic impacts, versus many of the other components of the fiscal cliff.

“House Republicans must end their intransigence on tax cuts for the very wealthy and sit down on a bipartisan basis to finish the work of this Congress,” said Representative Sander M. Levin of Michigan, the ranking Democrat on the House Ways and Means Committee.

A separate C.B.O. report released Thursday threw cold water on Republican beliefs that a simplified tax code that lowered income and payroll taxes and closed loopholes to make up for lost revenue would substantially close the deficit by boosting economic growth. Such a plan would raise about $100 billion a year by 2020, far less than Democrats say is necessary, the report said.

The forces arrayed against a budget deal remain powerful, and the gap between the parties — at least in their public postures — is wide. Liberals, backed by Senator Harry Reid of Nevada, the majority leader, say Social Security should not be part of any deal. Senator Bernie Sanders, independent of Vermont and a standard-bearer for the left, said Thursday that virtually all deficit reduction should come from tax increases on the rich, closing loopholes that have allowed profitable corporations to avoid paying any corporate income taxes and cutting military spending.

Mr. Corker said many Senate Republicans were willing to agree to a deal that raises more revenue through an overhaul of the tax code, and that additional revenue must be generated by taxation, not just economic growth. In a speech Thursday in his home state of South Carolina, Senator Lindsey Graham said that fellow Republicans should hold the line on tax rates, but that they had to accept that a reformed tax code would raise more revenues. Only then, he said, can they expect Democrats to negotiate changes to entitlement spending.

Speaker John A. Boehner, Republican of Ohio, has said he will agree only to a deal that lowers the top income tax rate from the current 35 percent, not from the top rate that is scheduled to kick in on Jan. 1, 39.6 percent. He said that additional revenue would be generated by economic growth spurred by a simpler tax code, not by higher taxes.

@Queenbee 5:47 p.m.,"Mammoth I don't know what Romney would have brought to the table."- - -My comment about the true state of the economy had nothing to do with who the president is.

But on the subject of policy & jobs - they can f*ck around with interest rates, buying treasuries, etc., but NOTHING will fix the problem of the lack of decent-paying jobs in the US until they bring Manufacturing back to America.

And that will not happen without changes in policy. The President's job is to lead the country, and neither Rmoney nor Obama are competent enough to lead.

I keep hearing about helping the poor. Yet if I walk down a street in Camden, I see people with big gold hoop earrings leaning against a building and checking their iPhones. These are the same people my church helps on holidays. BUT I see seniors freezing because they don't have enough money from Social Security to buy heat and medicine. I see lots of people without jobs. YET, I see program after program where you fill out paperwork and it takes months or YEARS to get help for housing or emergency care. I see hospitals that deal with the same influx of people (who are there to get drugs) while others bent over in pain are waiting. I see all this talk about TAX THE RICH, yet none of TAX THE DAMN POLITICIANS, THEIR PARTIES, AND THEIR LOOPHOLES. I see screaming that we need forgiveness of student loans--yet I don't see anyone willing to go to colleges they can AFFORD. What's more, I see REMEDIAL MATH AND ENGLISH classes (lots of them) in college catalogues. IF they need this, they DON'T BELONG IN COLLEGE.

I see screams about cutting military spending. Yet no one wants to suggest a draft for ALL (no exceptions) so that everyone is trained and everyone's butt gets put on the line in case of a war.

Prediction--We are going to pay a VAT tax, a death tax, a carbon tax, a soda/sugar/dining out tax, a food tax, a medical tax, a television tax, a heating tax, an entertainment tax, etc.

Other than buying gold and silver I pay a tax on just about everything. Mammoth there is no one that can run this country unless we do as GAW said raise taxes and cut services. Both of which Congress doesn't want to do. The POTUS can use its power to strong arm them or go to war. He doesn't tell the Fed what to do.

The problem is the people who have real wealth are not spending it and there is nothing the government can do about it. We have too much wealth concentrated in the hands of the few.

CL you won't see the poor, because there is not a stamp on their heads. If you are not wealthy you are poor or dependent on the crumbs that fall from their table. The middle class is fiction.

Taxhaven I think McDonalds is a poor excuse for food, but the children love it. I do not frequent fast food. You do get a lot more bang for your buck at a Chinese restaurant. We eat mostly home cooked meals.

CL said..."What's more, I see REMEDIAL MATH AND ENGLISH classes (lots of them) in college catalogues. IF they need this, they DON'T BELONG IN COLLEGE."- - - - - -I disagree.As somebody who was out of high school a dozen years before enrolling in college, I had to take REMEDIAL MATH.

Thank goodness it was offered by the college! After taking Algebra, Geometry & Trigonometry I was able to take college-level math like Calculus 1, 2, & 3, Matricies and all the other mwth that is required in order to become an Engineer.

If Remedial Math was not offered in college, then I would be pouring oil into machines, rather than designing them.

I l;ove this paragraph in the McDonalds article "Last month, Thompson had cautioned analysts that the "declining consumer sentiment, high commodity and labor costs and heightened competitive activity" had created an "uncertain and fragile" environment, which he called the "new normal."

Declining consumer sentiment=no one likes their foodHigh commodity prices=the need to add more sawdust to their hamburgersLabor Costs=That's a jokeCompetitive Activity=They make better food at Panera Bread Co. and Chipotle Mexican GrillUncertain and fragile environment, which he called the "new normal." which means it is a depression stupid and no one likes your food or mindless zombies serving it to us. If it weren't for targeted blitz ads on TV, parents would not have to give in to the kids begging to go to these places. Same goes for Wendy's, Burger King and Taco Bell.

Mammoth they better learn that lesson BEFORE going to college. I am glad that remedial math worked for you. I think public schools overall do a better job of babysitting than teaching. Also once you have been away from Math for several years you tend to forget. Just like a foreign language. Use it or lose it.

Mammoth-I can see it for someone who was out of school for years, but for a RECENT GRAD? No.

You see, the problem is that we have become sold on the idea that 'everyone' is college material. That just isn't so. You should hear my cousin the professor talking about her students in a Community college. Some hand in papers with the abbreviations of twitter texts. Most sit and text on their cell phone.

They are on the dime of the taxpayer OR Mommy and Daddy who have never disciplined the poor dears during their entire lives.

Queen--you think McDonald's is bad...look at JC Penny. The CEO has really shafted that store.

I'm worried...with no Sears or Penny's catalogue how will I manage in the upcoming 'not-a-Recession'?Guess I might have to make do with dollar bills as they are pretty much worthless, right?

Patraeus quit today. Think he might have been worried HE was going to be a scapegoat? But turbo Tim is going to stay on for a bit longer, as will Ben. They need to line up their lobbying jobs...or their jobs as professors.

I survived babysitting the grandkids for 3 days straight. Now I simply have to get through watching them for half days for an entire WEEK.

Hope everyone has a good weekend. Get out and enjoy something that makes you smile. All the doom and gloom will pass...or it won't but we'll all be too used to it to care ;-)

I am going to remove to video at the bottom, because I hate it when they autostart.

Also this story is so full of out right lies that it was too tasty to leave out. Fiscal Cliff will be played out as a Democratic issue and the Republicans will blame them in the MSM over and over. There is no fiscal cliff there is just an unwillingness to deal with it.

Remember how during the Bush year that Petraeus was portrayed as a paragon of virtue and possibly the next POTUS. Well generals also cannot keep their pants zipped any more than Clinton could. When was the last time a woman in the public eye was caught of having an affair? I am sure someone remembers and it probably was recent.

In the UK £ for £ you will always get a far better deal at a Chinese or Indian restaurant. However in comparison to what I have seen in the US McDonald's in the UK is a far more classier affair. May be because it is quite pricey here so it is going to attract a more "up market" clientele, but American McDonald's have always struck me as being quite grotty and you have to queue up with the underclass to obtain your food.